>> a former warden takes you through the historic missouri state penitentiary. also walk back through history in the halls of the missouri state capitol and governor's mansion. c-span's local content vehicles explore cities across america. next weekend from jefferson city, saturday at noon and sunday at 5 eastern on c-span2 and 3.
>> now on booktv, jonathan gruber presents his thoughts on health care. he's a leading architect of massachusetts' health care reform. he also consulted with congress and president obama on the creation of the affordable care act signed into law by the president in 2010 and upheld by the supreme court in an announcement made this past thursday. this is just over an hour. [applause] >> i'm not the entertainment tonight. i'm here to enjoy it myself. i really appreciate you being here at town hall tonight. i think it'll be very enjoyable. we have jonathan gruber here to speak. jonathan's an award-winning mit health economist and director of the health care program of the national bureau of economic
research, one of the longest titles and one i'd hate to have myself. he was a key architect, one of the things i ran into him or at least heard of him a hot when he was working up in massachusetts helping the massachusetts people put together their reform. he has also work with the the administration and congress when they developed the health care reform legislation that was passed about two years ago. he's also co-editor of the journal of public economics and associate editor of the journal of health economics. he's published more than 125 articles, has edited six research volumes, he's author of public finance and public policy and, which is a leading text. whew. which is why he probably speaks with great authority about the law. and what he has done is written a book called "health care reform: what it is, why it's necessary and how it works." i think it is a very fast but
also a very informative read. so, please, give a warm town hall welcome to jonathan gruber. [applause] >> thank you very much and thanks, bob, for the kind introconduction. introduction. i have about ten minutes to start, and there's a lot to talk about with health care reform, so i'm going to start with a little story. my younger sister, joelle, now lives here in seattle, and the story involves her. one time she came running to the house and found my father and said, dad, dad, where's mom, i need to talk to her, and my father said i don't know where she is, can i hp you? and she said, no, and walked away. she needed help with her math homework, and my dad has a ph.d. in finance, and she was
was -- he was a bit taken aback. and he said why can't i help you? and he said, i don't want to know that much aboutt. [laughter] so in that spirit, i'm going to try not to tell you more than you want to know here in the opening few minutes and rather let what you want to know come out in my conversation with bob and in your questions, which i'm eager to hear. i want to set a little bit of background which is to really understand the importance of where we are historically and in terms of the numbers. historically, we've been trying as a nation to do fundamental health care reform for about 100 years, about on average every 17 years we've tried toot health care reform. and we've always failed until 2010. and as we failed, the problems have gotten worse. the number of uninsured in america have continued to grow, now reaching 50 million individuals. and the costs of health care continue to grow. we got good news today that health care spending rose more slowly last year, but more slowly still means faster than the economy. we're still increasing health
care to about 18% of our gross domestic product. if nothing's done, by 2080 we'll spend four in every ten dollars on health care. by about 100 years after that, we'll spend 100% of our economy on health care. now, that may be good for the doctors in the crowd, but it's not good for the rest of us, and it's not really feasible. so we've got these twin crises, and in my book i represent them as a two-headed alligator that we're trying to deal with. and yet we've been unable as a society the deal with them. and the real breakthrough here, and whether or not he likes it the hero of our story is mitt romney, and the real breakthrough came with governor mitt romney in massachusetts in 2006 when he signed into law massachusetts' health care reform which took a new approach that hadn't been tried before, an approach i like to cry incremental universalism. incremental, or from the right, meaning leave people alone if they like what they have, but help people who don't, for whom the system doesn't work. universal, from the left, meaning let's get to universal
coverage. this had not been tried before. they was not a rip it up and start over approach. this was a let's recognize politically that we can't take away things people like, but that we can get to where we need to be in terms of universal coverage. he set up a system which i like to think of as a three-legged stool. the first leg was to end discrimination in insurance markets, to end a flawed system we have in america where people are just one bad gene or one bad traffic accident away from bankruptcy. the second step was to set up an individual mandate so that insurance companies could price insurance fairly, selling into this newly-reformed market. and the third step was subsies so that health insurance could be affordable for individuals under this individual mandate. this system was put in place in 2006 in massachusetts, and it's been enormously successful. we've covered about two-thirds of the uninsured in the state, and we've lowered the cost of health insurance in our non-employer market by about 50%. and this was the basis for the federal affordable care act
which after much toing and froing, passed in march 2010. the same basic structure as the affordable care act. but the affordable care act is more ambitious in two fundamental ways. the first is that candidate romney may not tell you this, but his bill was paid for by the federal government. so we did reform in massachusetts, we didn't have to raise taxes, as he will tell you. at he will tell you is because it was because the federal government paid for it. the federal government doesn't have that luxury. it's not like china's going to pay for our health care reform. so we had to raise revenues. that was one place we had to be more ambitious, and we can talk about those revenues and where they came from. the second is the bill in massachusetts was not really about the second head of my two-headed alligator. it was not about cost control. it was not -- and not about dealing with this probably more important problem, honestly, in the long run which is controlling health care costs. and i'm here to tell you that's okay.
that's okay because that's a lot harder problem. ultimately, more important problem, but a lot harder problem. but a problem that we're moving forward towards solving, we're just not there yet. in that situation, you try to move forward, and the affordable care act moves forward in a number of different ways to try to control health care costs that altogether will not really be the last word on cost control, but which move us forward towards, ultimately, controlling health care costs and not ending up spending 40 or 100% of our gdp on health care. and that's the two steps in which that bill was more ambitious. what my book does is really goes through that background, goes through what happened in massachusetts and goes through the details of the affordable care act, and i hope we'll get to answer any questions you have. but that's sort of just an overview i wanted to provide, and now i'd love to talk with bob and hear his questions and hear your questions. so thank you. pleasure. [applause]
>> well, thank you very much, jonathan. i think this is, this is an interesting topic you brought up. obviously, a lot of us here care a lot about what our health care system looks like, feels like. you mentioned one thing right in the beginning, though, had to do with incrementalism versus a broader sweep. could you speak a little more about why incremental this time, why not a broader sweep? how can we meet our goals if we don't? >> you know, i think the historical pattern's interesting in that every round health care reform be, the proposed approach has move today the right. every round we've moved from a single-payer to a somewhat less single-payer to the clinton system which had these regional cooperatives but still would have really fundamentally reconfigured the health care system. i think what was realized in this round was there's two fundamental problems with trying to completely reconfigure the health care system. the first is most americans are pretty happy with what they
have. they get their insurance from a large employer. they wish it was cheap, but they have a variety of choices, and they're pretty happy. in american politics you don't get very far by ripping what makes 250 million people to make 50 million other people happy. we have an $800 billion private health insurance industry in america, and it's not going away. we bailed out industries much smaller than that. we're not going to wipe out an $800 billion private insurance industry. we had to bring them along to make this feasible. i think those two recognitions led to this approach. it led to a realization by many who had a dream of a single-payer system that wasn't happening in the near term, and we needed to move towards this system which could get us to the goal of universal health care coverage. >> that's very good. i know a lot of us care a lot about continuing that. the, one of the issues that you brought up which is really important, you said there was --
a two-headed alligator -- you mentioned that we were working on the access issues, but really there's also the cost control. you mentioned that in massachusetts you didn't bite on that bullet, but you -- we did in the national. how did we, how much is going to be successful, or what has to be done to make that successfulsome. >> you know, bob, health care cost control is really hard. i like tthink of it, i didn't put th in the book, i like to think of it as having to get over two hills. the first hill is scientific which is, quite frankly, a lot of good ideas out there. we don't really know how to bend the so-called cost curve, how to slow the growth of health care costs in a way which will not put the u.s. health at risk. we know how to do it, we could just say we're not spending more than 18% of gdp on health care, we're done, that would do it. but that's not an effective solution when we know a lot doesn't improve health care. how do we distinguish what does and what doesn't? that's the first hill. and we're climbing it. the second hill, unfortunately s
the politics which is this is a very hard problem to solve because anytime you're pro something which can help control costs, it's easy for the opponents to attack it. and our political system is just not prepared to deal with this. so my favorite example of this was many of you may remember in november 2009 right when this was really in the heat of this debate, the preventive services task force -- which is an independent set of doctors who recommend when your kid gets immunized -- recommended that mammograms no longer be recommended for women in their 40s. this was based not on the cost of mammograms, this was not an economics-based decision, but baized on the psychological costs of all the false positives we were getting verses the limbed -- versus the limited benefits of catching early. the government wants to take away your mammograms, was the headlines. now, this was not a government agency, and they're not taking away anybody's mammograms. but it's bad enough that if you
read the affordable care act -- which i recommend you do not -- [laughter] it actually says one of the early deliverables of this book is that preventive screening in america is nowed for free. every american has the right to get all their preventive screening for free. and when they defined it, they say as recommended by the preventive services task force before november 2009. [laughter] so they literally couldn't bite the bullet in agreeing with that because the political blowback. that's a tiny example of how hard the politics are here. so it's a long-winded way of saying we've got a long way to go before we're going to get to fundamental cost control. what this bill does is take what i call a spaghetti approach to cost control. it throws a bunch of stuff against the wall and sees what sticks. develops a number of different approaches, each of which represents the best thinking of experts such as yourself and others on the best way to go forward on cost control. we're going to try them and see what works. >> how are we going to make sure we get there? >> well, i mean, there's our famous quote from herb stein who
said, um, if something must end, it will. eventually, we will get there. we will not spend 100% of gdp on health care. i honestly do not know, i cannot tell you today sitting here how we're going to get there. i can tell you that it is very unlikely we'll get there in the way england did. no one over 75 get transplants. that's not an american solution. i don't see that happening. i see us, ultimately, moving to an explicit two-tier health care system. if you're in the u.s. health care, if you're educated in income and typically nonminority, our health care's as good as anywhere else in the world despite what people say. all the bad statistics are driven by people out of the health care system. so right now we have an implicit two-er system, we need to move to explicit, in my view, where we guarantee a minimum. everyone is guaranteed good, basic health care. of we have to recognize that it's america, and if some people want to buy better health care, we need to let them.
most european countries have that, you can buy out of the public system with your own dollars, buy more generous health care. i think we need to move towards that system ultimately, but we're far from getting there. >> the exchange topic's fairly large, moved quite a bit. around the revenue. you mentioned revenue and how massachusetts was lucky it had $315 million coming down the pike. the national bill did not have that. the national bill also raised a lot of revenue and actually, i think, is good for the -- well, we call our balance deficit. >> deficit. >> our deficit is decreased because of of it. what actually does happen? who gets taxed, who pays for it? >> president obama laid out as, actually, his number one principle on this bill, it was sort of an odd place to start, but that this should not increase the deficit. that was a critical component. now, to make this bill work, we had to spend about a trillion dollars. so over the next decade. so we had to raise, we had to reduce spending or raise revenues.
so what the bill does is really several things. first of all, it cuts excessive reimbursement to private health insurers that insure the medicare population. due to a bill passed under the bush administration, we were paying $1.17 for every dollar they spent on insuring medicare recipients. that raised about $250 billion. we raised about another $300 billion by reducing reimbursement to hospitals that treat medicare patients. so about half of it was cuts and spending. but half of it is increase in revenues. those increase in revenues come primarily from two sources. one is new actions on the sectors that benefit the most from this bill. we are creating 32 million new customers for the pharmaceutical sector, for the medical device sector, for the insurance sector. they're all going to pay new excise taxes to offset the money they're raising off these customers. the second is a new tax on the wealthiest americans, an increase nor families with incomes above $250,000. >> okay, great. you mentioned pharmaceutical
industry, the health insurers. just, you know, from what i know the marijuana public don't -- the american public don't like these people. does this help them become better citizens? >> i think it does, and this is an important issue to cover because the trade-off with the political feasibility argument is that we had to bring private insurers along. we had to involve them in the solution. i know that upsets a lot of people. the bill tries to make them good citizens in two very important ways. the first is the use of so-called health insurance exchanges. right now if you want to buy health insurance in the so-called nonemployer market, it's a harsh marketplace where it's hard to shopfectively. it's confusing, prices are high. this sets up an exchange where insurers are offer in a common platform on the web which will be easy and competitive to shop. i urge you to go to ma health connector.org. it's a terrific shopping experience. i think it beats the pants off orbitz. and the key thing is when people are shopping across well-defined
products, that's when competition can work its best. so it'll be new, competitive pressure on insurers. blue cross charges more than other insurers just because they're blue cross, and people know them, and they have a good name. when they're on the shelf they'll say, wait a second, why am i paying 5 or 6% extra? that's when you start to bring costs down. there's an important rgulation in the law which regulat the share of money insurers raise they have to spend on medical care, it limits how much they can make on profits and insurance overhead to try to limit the extra money we're spending through that sector. >> good. i want to get a couple of parts of the bill that i think are important. one of them is the protection. one of the things that people don't trust insurance companies and that's because not just the transparency, but how they make sure they don't get eliminated because they're sick. how do we know that people don't have limits that keep them from getting pushed into bankruptcy or something else.
can you talk about the protections that are there? >> that's a great question and, actually, i think this is the most important part of the bill and the least appreciated. we -- most people in this room will have insurance from their employers or from the government. but we have to recognize that for the 50 million uninsured americans and the many more who, and the many individuals who are this the nonemployer market, they are facing an enormous risk to their financial security. we are, we have a system in america in most states, such as this one, where you can have bought insurance for many years, and the minute you get sick, you can be dropped. or sometimes states say they can't do that. fine, i can't drop you, that'll be $1 million a month. totally legal. that is a fundamental failure of an economy as wealthy as ours. it is crazy to put that source of insecurity, that source of uncertainty on our public. this bill ends that. no longer will you be denied insurance because you're sick. no longer will you be kicked off
insurance because you're sick. and no longer will the sick be charged more than the healthy. and that, to me, is the single biggest contribution of this bill. >> okay. it is very helpful. on the area of prevention you mentioned, we do have clinical prevention, but we also have community-based interventions which i think are really important. in fact, if you look at the health of a community, it's often times driven much lower than what we do in our community as opposed to clinical prevention. what does the bill do, and is it really making a difference in those areas? >> the bill is trying to make a difference in those areas. there's a lot of big issuesment what does the bill do? it puts a lot of resources and money into community health centers to try to meet the needs of communities. as i said, there's a lot of money for individual-based prevention. there's money for wellness initiatives. um, and basically, it's trying really -- what the bill tries to do is not just insure people, but to build on the resources we need to improve people's health beyond, above and beyond medical care. >> okay.
you know, i talk to a lot of conservative people who are very upset about people getting what is called an entitlement, or they have a gift or something given to them. the issue of personal responsibility rises with that population all the time. how does this bill address personal responsibility? >> you know, it is fascinating because what is more about personal responsibility than the individual mandate? and that's the genesis. the individual mandate is a conservative idea, the genesis was in conservative think tank, and when mitt romney signed the bill in 2006 on the podium with him was a spokesman from the heritage foundation, the think tank, saying how wonderful the bill was because of that individual mandate. because that's about personal responsibility. it's about ending the free riding where individuals jump into health insurance when they're sick and jump back out when they're healthy. this bill is really trying to thread that needle to try to thread the needle of using individual responsibility but not putting such a burden on
people that's unaffordable. for example, we have an individual mandate, but we offer large tax credits so low-income people can afford insurance, and we have an affordability exemption so no one has to pay more than 8% of their income for insurance. if insurance costs more than 8% of your income, you're no longer subject to the mandate. so once again this bill's about a giant balancing act. as you said to me in the green room, it's as if you shot a bullet through a thousand people, and it made it all the way through without hitting somebody. it is trying to do this amazing balancing act between addressing the concerns of personal responsibility but making sure it's a generous enough system to work. >> you wrote a book that's actually i wouldn't say called a comic book, but it's a graphic novel. >> okay. >> why? >> so a couple reasons. the publisher approached me and said we think this would be a great way for people to learn about the health care bill, and i was eager to help people learn because you read the polls, and you asked people what do you think, and 45% would say they like it. and then you say what about
ending discrimination insurance market? 70% liked that. what do you think about making hushes affordable, 70 percent liked that. people liked it, they just didn't understand it. so looking for a way to help people understand the bill. and the publisher said to me, look, what better way is there than the comic form? he said, look, when you're on a plane and what do they hand you? a comic, right? [laughter] he said, great way to learn. that's all well and good, the guy hung up. and then my 17-year-old son who's a big reader of this graphic novel format came to me and said this is a great way for people to learn and really convinced me to do it so that's why i did it. >> but you didn't have batman. >> i didn't, no. >> that was so great. i read it and really enjoyed it. now, next step, you know, who is the audience for this book? who do you think is really going to read it, what difference does it make? >> you know, i really have in mind the audience being anyone who has an open mind about this bill.
so i don't think it's going to really change the mind of someone whose mind is really made up, but this is really radical transformation of our system. it's complicated, and i think a lot of people are confused. i think there's a lot of misinformation and disinformation about this bill. so i view this as really appeal anything some sense to two groups. one green is people who are ranging from cautiously skeptical to cautiously supportive but just unsure. and they want to read it and learn and decide for themselves. i also, quite frankly, have a particular audience in mind which is the people who are very much inclined to like univerl coverage, to like what a democratic president does but just feel like this bill didn't get there, it just didn't meet their needs, they're just not satisfied with it. i am stunned with the number of self-described liberals who don't support the bill. so that's another sort of specific audience i'd like to reach with this book. >> before i get to the next question, i think we -- i'm
going to do one more question, but i'd like to open this up to the general audience here. and i think we have two microphones, one there and one over there. so if people want to start asking jonathan some questions, please, feel free to line up. i want to go back to your whole area of rationing. and i won't call it rationing. but that's what the opponents of this bill call it. we have things like comparative effectiveness research which means comparing what we're doing, whether it works or not. and you mentioned the two-tiered sort of system. what are we going to -- how are we going to approach health care in the long run in this country as far as, you know, what -- you know, there are limits to what you're going to do. as an aco, these different mechanisms are built into this, are they going to take care of that? are the, you know, how are we going to make those hard decisions and how are we going to inform ourselves in the best way to do it? >> this is what's really hard. so, basically, if we think about
the coverage problem and the cost problem, the coverage problem we sort of knew what to do, it was just a matter of crafting it way to get it through politically. the cost problem is much harder because we just don't know. and, you know, we just don't know what will work scientifically and what'll pass politically. so, frankly, you mentioned comparative effectiveness. here's a great example. health care is the single largest and single fastest growing sector of our economy, and we have no freaking idea what works, okay? we don't know what works better than what. i mean, it's crazy, right? what do you want to do in that situation? do research on what works better than what to make health care work. however, once you mention that in this bill, people said, well, wait a second, that means the government's going to ration our care. so there's a billion dollars devoted to study what works and what doesn't. but the results of that are explicitly not allowed to be used in setting insurance decisions. that's crazy, right?
ultimately, we've got to use it to set insurance decisions, but that was a political compromise. so that's an example of you need to do that. the bill has in it, um, dozens of pilots of alternative ways of organizing care. we have what this so-called fee for service medical system which is where doctors, essentially, get paid the more they do. and there's a famous quote having a doctor decide how much medical you get is having a tcher deciding how much red meat you should eat. we need to move away from that towards a capitated system where doctors, um r paid based on how healthy they are, not how they treat you. but that's hard to do. a famous health care economist has reinhart's law which is that health care costs equal health care income. anytime you want to control health care costs, you're going to be cutting someone's income. that's hard to do. how do we get there in a way which will bring the relevant parties along? that's what we have to work with. so the bill sets up dozens of pilots so we can learn and come back and say, hey, this worked,
this didn't. now let's go for round two and bend that cost curve. >> with okay, great. why don't we start over here, the first question. >> hi. i'm definitely one of those liberals who really doesn't understand the bill, so i'm delighted with your graphic novel format. thank you for that. i pay out of pocket myself for my own health insurance because i'm self-employed, and recently became pregnant and so got involved in the system each deeper. even deeper. i was delighted with group health until i became pregnant, and once there were a series of tests recommended, prenatal screenings, etc., i suddenly became mired in the quagmire of trying to estimate costs up front of what i'd be paying out of pocket, you know, towards deductible. and i want to know why is it legal for the health care industry, for health care providers to not actually tell you up front exactly what you will be paying for a given service prior to getting the service? because what ended up happening was i ended up paying double
what i was quoted initially and now, of course, i'm fighting it, but it's just, it's a quagmire. so i'd love your answer to that. >> you know, that's a great question, and this is a great example of the type of -- first of all, congratulations. [laughter] second of all, it's a great example of the type of problem we'll be solving with health care reform. i mentioned these exchanges. i urge you to go on ma health care.org to see what's coming which is we standardize benefits in a way where you go on, and you will see exactly what you're paying. now, you come to the question of if there's a deductible, then it matters how much are service costs. that's a great question. that's not only happening well enough in massachusetts yet. really what you need is to be able to go on the web and say i want these services, what will the insurer charge me for that? if any of you have gotten
medicare part d coverage, on the medicare drug site you can enter which drugs you're use, and they'll tell you what you would spend out of pocket each month on each plan you might be in. so, basically, that sort of facility exists, we need to use that for all of health care. once again, that will help consumers become better informed and shop more effectively across insurance plans, and that more effective shopping, economists i believe in this in my soul, thas going to bring prices down. that will help in that sense. >> how is it legal that up-front costs are not stated overt ri? >> you know, i'm not really an expert on health care law. i think certainly it'd be illegal to state them incorrectly. >> right. >> but i think -- >> well, they get around it by saying it's a quote. >> i don't have a good answer to that. >> i would just say honestly people don't know, nobody knows really how much it's going to cost until they actually see the experience. i was on our pebb, we had ten
plans. i couldn't figure out how to compare one versus the other. and until you have some way of, you know, comparing an apple to an apple, you're stuck. >> uh-huh. thank you. >> over here, please. >> professor gruber, um, i think the substance of this conversation is way more interesting than the politics, but i'm going to wallow in the politics just for a moment, if you don't mind. so as someone who who was there behind closed doors with mitt romney on this, i'd be very interested to understand, was he an engaged ceo participate anything these conversations in a deep and thoughtful way, or as he would have us believe now, did he do this kicking and screaming and thisas sort of over his live body? [laughter] [applause] >> well, for those of you who don't know, lowell was writing speeches for our previous commander in chief, for president clinton, so he knows about this sector well. so, basically, um, you know,
mitt romney was a real believer in this. i mean, i really only had one meeting with mitt romney. i work with the a team to develop the plan, and we went in, and in that meeting, it was basically mitt romney defending this against his political advisers who said you don't want to do this, this is a terrible idea for you. and he's saying, no, this is really cool, we can do this. because at his heart he's a management consultant which is really engineering. and massachusetts had this unique position because we're getting money from the federal government, we could put together a system where we could get universal coverage without raising tax. and as a republican, he thought that was kind of neat. look, we'll have personal responsibility for the mandate, weevil cover everybody -- we'll cover everybody but won't raise taxes, he was excited about the puzzle and excited to put it together. and, look, i'm not just saying this because i'm a democrat. he honestly is the hero of health care reform. i mean, literally, truly, we do not get the affordable care act without mitt romney -- [applause]
and, you know, i'm not, i realize that's a self-serving stement, but it's really, really true. and i'm as disappointed in anyone that he's walked away from it the way he has. >> thank you. >> yeah. thank you very much for your clear presentations. i mean, this is, your answers are terrific. my question's about the public option which died a sad death. and whether genuine cost control is even possible without a public option to drive it. i mean, you've discussed these sort of sort of experiments, what we'll be doing, but meanwhile my understanding is that in massachusetts the costs, particularly for private employers, are rocketing at an unsustainable rate. so they have to be controlled for the program to work. can you have cost control without a public option? >> okay. so, great question and one i'm glad came up. first of all, massachusetts has
risen at the national rate which is fast, but no more, no less in our employer market. and our nongroup market has fallen by 50%, as i mentioned. but the public option's a great issue. i'm a big fan of the public option partly because it's the brain child of an academic like myself, jake hacker thought this up. he had a great idea. look, the left wants single-payer, the right wants a competitive exchange, let's have a competitive exchange with one option single-payer. it was such a great idea that both sides hated it. [laughter] and, basically, both sides hated it in the sense that the left didn't want it unless there was a huge advantage for that single-payer in the exchange, the right didn't want it if it was there at all because they were worried it'd be too successful. um, i'd like, the message i'd like to deliver tonight is don't get too upset about that, and here's why. the public option was never as big a deal as it was made out to be, okay? because at the end of the day -- here's an example i like to think of. let's say there's three sellers
of apples, and they're 20 minutes away from each other, okay? each of those sellers doesn't have to worry too much about competition from the other seller because there's no way to compare prices effectively. now you set up a fourth seller called gov apple which is to minutes away -- 20 minutes away, and they're cheaper. a lot of people won't drive there, it's not going to help that much. now, you introduce a web site where you can compare online the prices of all three apple sellers. that'll help a lot because now you'll know where to go before you leave. if you have gov apple on the web site, that'll help even more. and i think people are understating the importance of the exchanges as relative to public option. it's putting these insurers' feet to the fire saying, look, show us what you've got and show us the internships. let's see what you have. -- the alternatives. let's see what you have. if that doesn't work, then we'll have to revisit single-payer. in the meantime, don't forget states have the ability to have
a state-specific public option. i've work with the the state of connecticut which is planning to introduce one, which is great. then we'll experiment to see if it is as good and useful as some people like to think. the message isn't the public option's bad. the message is it's not nearly as big a deal as it got made out to be. and we've done the important thing of making them be competitive and show their prices in a way which can allow comparison shopping. if that doesn't work, then we're going to have to revisit some kind of single-payer system. this bill is the last, best hope for private insurance. if this bill does not work, if we cannot control health care costs under this structure, then we have to rip it up and start over. >> okay. over here, please. >> yeah. i'd just like to know, um, is there anything in this that addresses preventive care and not just kind of like preventive care in, like, mammograms and screenings, but as far as, like,
nutrition, just as far as, like, chemicals in food, sugars, incentives to produce all of these things by companies? because it seems like you're going to have this, like, really good incentive on one side, but then on the other side you're always going to have somebody pulling, and you've already got subsidies in the place. so without getting rid of these, how do you just layer more on top, essentially? >> that's a great question, and it highlights the difficulty of a bill like this. principally, you'd like it to address all of that, but it' never get passed. my biggest frustration with critics of the bill for not going far enough. it went as far as it could. there's a lot of big issues like that we need to address. the bill does some things in that direction. as i said, preventive screenings. the bill also addresses a tricky issue which is what about allowing insurance prices to depend on the efforts people make to take care of their health? so on the one hand, the bill allows wellness discounts. so if you take care of your health, you can pay a lower price.
that's a good thing. on the other hand, if that goes too far, it becomes discrimination on health. o how do you balance those two? the bill tries to balance between those two. what it doesn't do is take on things like food systems and the problem of food deserts and other problems we have in the system, other issues like as sugar and soda availability in our schools and information about nutrition. these are larger, systemic issues we need to deal with in additional legislation. the bill doesn't really get into them. >> stage left. >> my question is, why is health care spending in the united states two or three times as expensive as every other advanced country with no better results? >> so that's -- [applause] great. a great question. our health care spending is about twice the international average, twice the developed country average. um, part of that is because we're richer and bigger, but even if you control for those factors, still our health care spending is on the order of a third higher than it needs to
be, than you'd project based on the characteristics of our country. um, we don't really exactly know why. we know it's partly prices. we pay a lot more for things like prescription drugs. we pay a lot more for our cat scans and mris. we pay our doctors a lot more. not our primary care doctors, special bists make a lot more, okay? part of it's prices, but that's not all. part of it's utilization, but that's not all. in many european countries they go to the doctor more than we do. in japan they use abou twice as many prescription drugs as we do, okay? the difference is what's unique about the u.s., the messed up uniqueness of the u.s. is once a system gets ahold of you, it squeezes and doesn't let go. i tests you, it keeps you in the hospital longer, it does extra procedures, and that is the quantity piece. it's really about intensity of treatment once you get in the system. and that is, once again, hard to know what to do with. many of you may have seen the
june 9, 2009 article, really the best thing ever written about health care in my mind comparing two cities in texas. and two regions which are very similar in demographic composition, very simple outcomes, yet one spends twice as much as the other. and the reason is one does tons of extra tests and procedures, just there's facts in the book. i have lots of facts about all the extra stuff they do. and the question is -- the problem is if you go to those doctors, they'll say, no, this test was needed because this person had the symptom, a they make a compelling case for each example. are we just going to tell the doctors you can't do that? that's the problem we need to figure out going forward. in european countries partly because they just don't have the history of excessive treatment that we do they haven't run into this problem. >> stage right. >> it seems to me one of the big
benefits of the changes is the ability for people to change jobs, to -- that they won't get shut out either from employer to employer and change insurers or even the ability to go off and start a business of their own, move away from employer-based health care to a business of their own where they could go to one of these exchanges. has there been any work done to put a value to that, to the economy as a whole, people being able to change jobs to a job that they're better suited for? >> a question after my own heart. that's what much of my academic research was on when i was getting started as a professor, exactly that question, the so-called job block. people will be afraid to change jobs because they're afraid of losing health insurance. the best estimates are that among people who have medical hh insurance, there's about a 25% reduction in the odds of change a job just because people are afraid of losing health insurance.
that's an enormous problem. a positive source of u.s. exceptionalism is how fluid our labor market is, the extent to which people can move to job matches that are best for them. health insurance tied to employers block that. this will end that. you will now be able to keep your health insurance regardless of where you move. it's not been well quantitied. -- quantified. we do know it will greatly improve labor mobility and people will no longer be afraid to move to jobs which are the best fit for them. >> stage left. >> t. r. reid noted in his book that we're the only country in the world that has for-profit insurance companies. is that relevant in this conversation at all, insurance companies? or basically the same? >> you know, it's really not relevant. i mean, i realize it's a hard thing to say but, actually, someone mentioned massachusetts. our health care costs are as high as everywhere else. we have no for-profit insurers in our state. i mean, basically, the problem is not -- by and large, to be
honest, the problem is mostly not even insurers. there are some bad actors. some of those bad actors will go away because we're going to get rid of the kind of insurance they sell. some say we'll pay $500 a day for your stay in the hospital, people not realizing a stay in the hospital is $3,000 a day. so that does them nothing. we're getting rid of that fly-by-night inshires. some insurers will go away with the medical loss ratio regulations. with those regulations in place, the truth is there's not really evidence that for-profit versus not-for-profit insurers behave differently on the key elements. i think the important thing is not to distinguish for-profit or nonprofit, but distinguish insurers that sell bad products and excessive margins, and that will go away. >> stage right. >> so when these plans are set up, we're looking at sort of a
static health care system. yet health care's not a static system. it's, i mean, there are new drugs. i'm not supporting the drug companies, but there are new drugs, new procedure, then there is comparable effectiveness. but, again, that's looking at sort of a static system. health care is also driving forward because we haven't cured most diseases. in fact, any -- i mean, very few. and so there's, there also is a industry, if you will, be it university or private industry. how will the bill address the ability to go forward, and how will it be flexible enough to allow the appropriate changes to occur? >> you know, it's a great question. so there's two facts which are seemingly consistent with each other but really combined explain the difficulty in controlling health care costs. fact one is from 1950 to today,
health care costs have almost quadrupled as a share of gdp, and yet overall it's been worth it. david cutler teaches at harvard university, he documented how much healthier we are. health care sucked in 1950. i mean, let's be honest. if you had a heart attack, you were three times as likely to die within a year, babies were twice as likely to die in the first year. i mean, we are -- health care's just a ton better now. that's fact one. fact two is we waste about a third of what we spend on health care. when people want to review charts of how people were treat inside the hospital, we waste about a third of what we spend. they might say how are those two consistent? how can the increase in health care spending be worth it, and yet we waste one third? the answer is the other two-thirds is awesome. [laughter] so, basically, the other two-thirds has carried the wasted one-third along. so that comes this question, that's why the right answer is not to roll in and say we'll no longer spend more than 18% of
gdp on health care. that would be a mistake because we don't know what's coming down the pike. enormous and incredibly impressive medical interventions that greatly improve the quality of our life have come along since 1950, and new ones will come along over the next 50 years. how do we separate the fat from the muscle? how do we keep the ones that are doing us good and get rid of the copy cat drugs that respect doing us any good? the key is more competitive insurance markets, the things that are done in this bill, but that's why cost control's so hard. >> stage left. >> thank you. one of the economic arguments i've heard against the affordable care act is that healthy people will simply pay the penalty until they become catastrophically ill at which point they'll jump back into the system, and they can't be denied coverage which will e effect fly drive up costs for everyone. is that a balanced question in your mind? >> if you had a mandate that
said if you don't have insurance we'll kill you, that would be incredibly effective. [laughter] sort of self-defeating. on the oth hand, if you have a mandate which says, well, have health insurance because it's a good idea, that is knot going to work so well -- that's not going to work so well. you pay a penalty, 2.5% of your income. if you don't have health insurance. so that penalty's a real penalty, but it's less than the cost of health insurance for many people. there's a balancing act there. in massachusetts it's pretty comparable to our penalty in massachusetts, and in massachusetts almost everyone complies with the mandate. the truth is americans are actually a pretty law-abiding people. for example, we massively undercheat on our taxes. relative to the optimal amount of cheating on our taxes, people should cheat a ton more than they do. [laughter] we're pretty law-abiding people. okay? and, basically, if you have a mandate in place with a penalty that's real, which this does, by and large people comply. but many won't. i mean, the actions of the congressional budget office is this bill will cover 60% of the
uninsured in america. there's three groups that are left out. unfortunately, undocumented immigrants are completely left out of this bill. that was a political decision made right at the start. there's nothing to be done about that. second is people who will be exempt from the mandate because while we want to bring people in, we don't want to penalize people who can't afford it. and the third is people won't comply, and there will be perhaps millions of people who don't comply. the point is, as long as you get enough people in the system who are healthy to keep costs down, then that's good. then that'll work. but we're going to have -- this is going to be a constantly evolving scenario. look, the biggest change we ever made to the medicaid program was the prescription drug act added 40 years after the program was introduced. these programs change a lot over a long period of time. we are far from done with health care reform. but this is our best estimate about what will work to balance having a mandate that's humane but will really work. >> thank you. >> stage right. >> hi. um, i actually had a question regarding, um, the ending of
reimbursent for readmissions in the hospitals. i'll start by saying i'm very much a -- i do support universal health care, very liberal in that as peck. but i am a cardiac nurse, and congestive heart failure is one of the top reasons for readmissions into hospitals. and knowing that that's a degenerative disease and that especially in these economic times it's very hard to prevent readmission just due to lack of insurance, lack of being able to afford the medications needed to control congestive heart failure, and at a certain point you can't. you need to be readmitted and eventually you end up not getting out. what i've seen this bill do in that aspect is the closest thing i can correlate it to is it's made me feel how i can imagine
teachers felt during the passing of no child left behind. it's put tons of pressure on the nurses, the amount of charting and extra discharge instructions, paperwork we have to do. that's really where the hospitals put the pressure. and we're already spread so thin. um, so i just kind of wanted to get your opinion and if you could expand a little more on the decision behind that and the logic behind that. because it seems a little backwards to me. >> you know, economics is called the dismal science. and the reason is because a lot of what we do is just point out problems and not solve them. you're pointing out a probl. this bill, i've mentioned a lot of times, it's about a balancing act. on the one hand, a key cause of high health care costs and poor health care outcomes is excessive hospital readmission. hospitals rush you out when you're not ready to leave, and then you have to be readmitted. on the other hand, there are people who legitimately need to be readmitted. how do you balance those?
we have a feature which lowers medicare -- it doesn't get rid of it, but lowers reimbursement for hospital readmissions as a balancing act to kind of penalize hospitals for readmissions but not completely so they're not left with my reimbursements. that is the kind of thing we need to and see. it may be that cutting reimbursement admissions hurts patient health. we have to study that. but right now what we know for sure is we're spending too much money on readmissions. we have one -- the closest parallel i can give you and the reason you might feel more comfortable is in 1983 medicare went to the perspective payment system, drgs, you know about this well, i'm sure. you got paid a fixed amount for each administration regardless of what was done to the patient. after that system was put in place, there was an enormous reduction in the length of stay, it fell by 20% almost overnight. with no reduction in elder
health. elders were no less healthy. we were just treating them too excessively. that's an example. we have to try these things and see if they're going to work and we, hopefully, get that outcome. >> thank you. >> stage left. >> there was a piece in the new england journal, i think today or recently, about one of the challenges in the supreme court. not in the individual mandate, but the challenge out of florida that the federal government couldn't force the states to raise the number of people who are covered by medicaid. and each though this was rejected at a lower level, the supreme court reached out and decided that they wanted to hear it again. so what are the chances that none of this matters, that the supreme court's just going to pull a citizens united and get rid of the law? >> well, you know, the supreme court decision has four elements. one of them's the mandate. another one is this, quite
frankly, much scarier one which is this question of whether the federal government can compel states to offer medicaid coverage that the federal government's paying for. they reimburse the states for 100% further -- for the firs several years and 90% after. that is a hugely broad implication for many, many programs. for a large part of how we do our social insurance in the united states. and i was very distressed to see this. only one decision supported this. it was the most radical of all the decisions. this is a judge who went out of his way to cite the boston tea party. i was very disappointed to see the supreme court take this up. i'm very confident they will not find this unconstitutional because it would just cause a radical rethinking of our entire social insurance system. >> thank you. stage right. >> you've spoken quite a bit and
the question from the woman who tried to get health insurance from group health and was trying to compare the costs. you spoke about how massachusetts has made the transparency in the system a lot greater for people in the market in insurance. i'm a practicing physician, and one thing i'm struggled with is the rack of transparency of what i have for the outcomes of my choices. can you speak about it, because i'm still sort of unclear, sadly, how this bill if it does how it increases the feedback to providers of health care so that they uerstand the consequences of their decisions and can actually make better decisions for patients? >> you know, the bill does not do enough explicitly on that. it does things, basically, implicitly through the notion of setting up new structures where the insurers have that incentive to provide feedback. so a great example of the kind
of feedback would be to have discussions about end-of-life care. we know what sarah palin did with the death panels, and we were done. it got pulled from the bill. so, basically, a lot of explicit language about physician information, physician decision support got labeled as rationing. and got pulled from the bill. the hope is that implicitly this will happen. new structures will bring physician in having that information and using that information more effectively. um, we're seeing it in some of these new organizations set up. i work with care first, the big blue's down there. they're setting up a really cool, new patient-centered medical model where primary physicians will see the costs that specialists are recommending and actually bear some financial risks of those costs and say, you know what? you should care about this because we're going to take a little bit from your pocket if you send people to expensive specialists. so we need, i think it's really
going to be up -- given that the government is politically unable to set those things up itself, it's up to the insurers to lead on that front. >> stage left. >> um, i think there's a fair amount of us here who are resident right now, and i think in training we hear a lot about, you know, you need to order this test to cover yourself, you need to make sure you document this, cover yourself. is there anything in the bill that will have some changes in medical legal so that you change your reasoning a little bit more about what you're ordering so that it's not always just covering yourself which, inevitably, raises costs of health care? >> well, thank god, because i've never given, i've never talked to a crowd that includes doctors where i haven't been asked about malpractice, and it was getting towards the end here, i w getting worried. [laughter] actually, the answer's simple. malpractice will solve 100% of our problems in health care.
no. [laughter] in all seriousness, it's a really tough problem. the malpractice system itself is a trivial part of health care costs. the premiums, everything else, it's preponderate 3% of health care -- it's .3% of health care spending. people might be worried about malpractice regulations, and we just don't know. the best evidence comes from an economist at the harvard kennedy school who estimates it's about 3% of health care spending is defensive medicine due the malpractice. but the uth is he just pulled that out of a hat. i mean, the trh is we just don't really know how much is, um, is defensive medicine. that's why what the bill does is include the ability of states to set up pilots for alternative way of adjudicating medical malpractice states, trying internship ways of doing that. but, you know, it's hard. some states just try a blunt we'll just cap damages. that's not a great idea either. if you had a relative killed by a doctor, it's not clear why
you'd be happy getting $100,000. we need to move towards a more rational system where cases are handled in a way where the compensation is close to the damage that's done. we don't know how to get there yet. my instinct is even with that law, doctors would still worry about doing the right thing and doing what's the community norm and things like that. but certainly we'd like to try to work with them and see if that can help. >> stage right. >> yes. um, there have been some editorials in the medical community about the, actually, the success of medicine is that more and more people are living into old age and then we will actually have more dementia, the worldwide incidents of dementia actually increasing. and with end-of-life care being so expensive, will the bill support ideas for helping with managing those costs?
>> um, long-term care costs are a growing share of our health care bill, and that is an important issue that is dealt with partially in the bill. i mean, one major feature of the bill was to introduce insurance in principle for long-term care costs, the so-called class act. that was decided it wasn't written appropriately and couldn't be implemented appropriately, so the administration's not implementing that program. there are other features of the bill which try to improve the use of community-based care which, as we know, is cheaper and makes people happier than being in nursing homes. but, you know, that's not, to be honest, it's not a major focus of the bill and, to be honest, i think that is something we need to keep working on and thinking about these ever-rising costs of long-term care as our population ages and the hard decisions we have to make about end-of-life care, i think, is going to be a challenge. >> and stage left. >> hello. i'd like to, um, ask about a potential access issue if we
have a bill that's bringing many more previously uninsured folks into the fold of health care. um, as somebody who works in primary care, i hear about the shortages, and if we're going to have potentially 50 million more people coming into our offices, is there anything in the bill that addressed that, and how are we gng o head that off at the pass? ..
until we get that in place, until we get that address your not really going to deal with the primary care shortage america. >> thank you. stage right. >> a want to ask a question of basic health, and hoping to argument for it. i no you're written something about how and moved from one 3/8 to 22. not really helping that much. health director for a travel health program. it will be really hard to talk folks in the paying the premium. it's a little bit too high and it's also the problem of reconciliation with mike get a tax bill. so you make the case for me?
i think you can do it better. argue that we should have a basic health plan. >> so someone has read my work. [laughter] read my work without comments. so the question was about something called the basic health plan. flexible interest. the way the bill works is expand public insurance coverage up to 132% of the poverty line. above that level till we get to four times the poverty line there are tax credits. you pay a certain percentage your incoming and the government picks up the rest of the cost of insurance. from 133 to 200 percent of poverty in that range from 30 to $45,000 a year for a family. in that range states can say, look, we will continue to put people on public insurance : give free so that we won't have to pay.
it will afford that because we pay doctors less than their public insurance program. we will have people pay less and pay doctors less. the doctors and not a huge fan of this option necessarily. arguments for and against it. the argument against it is that, in my view, it does increase insurance churning and it puts a lot -- we just had a question about primary-care doctors. already strained to see our publicly insured population reimbursed so little. it puts more strain on that. the kid is a state-but-state decision. each state is to look. actually based on a plan in washington stte, i believe was the genesis of the basic health plan. some states like washington will want to keep that. i don't rely think their is a right answer. it's something that has to be decided on a state-by-state basis. >> to more questions. stage left.
>> shifting back to politics briefly, one of the ways that mitt romney has tried to disavow what he did in massachusetts has been the state's rights argument. it worked in massachusetts but when necessarily be the right thing for the nation. is there any particular reason why the massachusetts approach would not scale nationwide? >> no. [laughter] [applause] i mean, basically, you know, mitt romney had a choice of three things he could have done. he could have done like what newt gingrich did with the marriages and disavowed it and said, made a mistake. it's in the past. the second is, it is the right thing to do and it's a great idea. he tried the middle ground. a great idea for massachusetts and not for everyone else. to do so he told a couple of disingenuous things.
it's pretty cheap one. we then he said, well, it's not right for the rest of the country, but he never said why, never. he just says it will work for massachusetts and may not rest of the country. well, that's another reason. bonilla soap being disingenuous. >> and our last question, stage right. >> in seattle tonight we estimate that there probably about 8,000 people who are homeless him. some of them for reasons of around refuse to apply for medicaid. what will happen to these people who? the ones who refuse to give access to of the trust? >> you know, as you can tell, i'm a big plan -- fan of the affordable care act. the remaining problem, on the margins of society. in massachusetts we achieved in
98% insurance rate. the 2 percent that are uninsured are mostly low-income people who get free health insurance today and just don't take it. and these are people on the margins of society who do understand, comprehend to meet the language barrier. just a huge role for community outreach, the kind that dr. kristin's organization does and other organizations do. continued to, the system can help them so much more. so just as we work about, this bill does not solve problems. we need help from community organizations. >> i would like to thank the audience. the most knowledgeable and enjoyable audience, great questions. i have one quick comment to make you know, public education. when her 20 years ago. we have been fighting about it ever since.
at think we're going t do the same thing with health care. a structure in place and try to improve and our time. it is an important thing to do and a lot of the questions you were pointing out, holes in the system, its structure. we base decisions as a country, and that like to see us making better. lastly, i think jonathan for a great presentation. [applause] >> thank you. >> thank you very much. thank you very much. thanks for having me. [background noises] one b. [background noises] him.
>> is there a nonfiction of for a book you would like to see featured on book tv? send us an e-mail at book tv at c-span.org or tweet us at twitter.com/booktv. >> and now joining us on book tv is scott moyers, publisher of penguin press. we want to find out some of the new titles coming out in the fall of 2012. i want to start with the patriarch. >> a sort of extraordinary story . ted kennedy before his death reached out to david nassau, author of the atlantic biography of andrew carnegie among other things, and give him an extraordinary offer which was to say he gave an exclusive access to the kennedy family paper some of the papers of his father, joseph kennedy, which had never been shared with any biographers
, and there were no strings attached. no family review. and david spent years on this book the to the archives, digging passed the myth and release starting from scratch. one of the things these papers allowed him to do, of course, is to get a kind of closer to the emotional core of joseph kennedy because of his letters were voluminous and had never been used. i think crucially david was, for the first time, really able to follow the money. the kennedy family fortune has always been a black box. dave was really able to put together exactly how justice kennedy did it. hollywood is a big part of the story in a way that is not exact to be understood before. we all know of wall street. we all know some of the myth, some even more true than we might have thought. others less so. i think in the end why ted kennedy, we can't as canal, but white ted kennedy picked david
nasaw is that he saw a model for the arc of his father's life, someone who made a great fortune relatively early and then spent the rest of his life figuring out ways to do good with it or to do things with. and, of course, in the case of joseph kennedy, one of the most faithful things he did was out making some president. that piece of the story, how joseph kennedy was involved in his son, it's fascinating and their arsenal news breaks in this book. >> they're is another book coming out as well. >> yes. an autobiography, a memoir, stagecraft. did is -- for a man who has such a reputation as a diplomat it is a delightfully unvarnished. no secret that he had some real issues with the bush administration over iraq and other matters. no secret that he had issues with the state of israel over the lebanon invasion.
in essence, what is poignant about this boat is that there is a lot in it about what he tried and failed to do, what the limitations, but what is really quite moving and not really expected is that this is also a reminder of how much the u.n. actually does do to improve the lives of millions of people around the world in a way that's really off the raiders in. his account of what this organization does and its role in the world today, it's an argument for the essence. it's also a lament for what it can't do and then at the end of the day it's a great statesman with great power on the world stage. also some of the most dramatic issues of our time telling stories of people, defense, telling his true, unvarnished stocks of some of the great characters that he had to work with. >> so above books coming out in
the fall of 2012. >> it's right. this boat after the election and the other bore. right around the u.n. annual meeting in new york city. >> nobel prize winner. >> his long awaited more of the civil war which tore his country , nigeria, asunder, and the late 60's, the star the roster is live. he never talked about it and never wrote about that. this book is in part a coming-of-age and a coming of age before himself as a writer and for his country. very moving because it showshe hopes and promises for the san country and how tragically hope turns to hatred. the civil war tore the country apart and set it on a pre maligned course. it's a beautiful book that really has the writer is the
voice of conscience. what is it to be committed? what is it to stand up and coming you know, speak for those who won't or can't speak. and chinua achebe has done that since his first novel which still sells to hundred 50,000 copies of every year. and so some 80 million copies since publication in 1959. through to this memoir which is in a gift -- maages and capstone to his career. >> how is his health? >> he has somewhat weakened. as you know he is in a wheelchair. his brain is still strong as ever. are going to be careful with this time. many pple would like to do things with him this fall. we will have to be pretty careful of limited, but i think will we will will do, bring down the thunder.
>> finally a former "washington post" writer who is familiar to lot of viewers on c-span. another military book coming out >> it is in no way a combination of 25 years of covering the military. a book called the generals. the study of military command from world war ii to the present is looking at the art of the general. would differentiates great generals from not so great generals. one of the things that provoked this book, in 2005 tom was on what the cost-fried going over the old worldar ii battle ground with some officers from leavenworth in the general staff college. they're were telling the story of the battle and on a strip of the fact that general and led the invasion initially was the mullis fired two weeks later by omar bradley. this story tom heard just